Tax Return:: Personal Super Contributions Tax Deduction

Hello, this is your tax and super specialist, P&C Tax Professionals.

Did you know that if you make personal contributions to your super fund, you may be able to claim a tax deduction for it when you lodge your tax return? However, there are specific requirements that you must satisfy first before you can claim the deduction.

<Eligibility for personal super contributions deduction>

What you can claim

You are deemed to be eligible for the personal super contribution deduction if you have received income from:

> salary and wages

> personal business (e.g., self-employed contractors, or freelancers)

> investments (e.g., interest, dividends, rent, and capital gains)

> government pensions or allowances

> superannuation

> partnership or trust distributions

> a foreign source.

In other words, to claim the deduction, you must have made your personal contributions to your super fund from your after-tax income (e.g., contributions that were paid from your bank account directly to your nominated super fund).

Moreover, your personal super contributions that you decide to claim as a deduction will count towards your concessional contributions cap. If you exceed your concessional contributions cap, you would have to pay extra tax and any excess concessional contributions will be added to your non-concessional contributions cap. Hence, if you are planning on making personal super contributions from your after-tax income to your super account, it is important that you keep track of your concessional contributions cap in order to avoid an unexpected tax bill.

What you can’t claim

Any superannuation contributions that were paid on your behalf by your employer directly to your nominated super fund cannot be claimed as a deduction. Examples of contributions paid from your before-tax income that cannot be claimed as a tax deduction consists of:

> the compulsory super guarantee

> salary sacrificing super amounts

> reportable employer super contributions.

<How to make a claim>

Once you’ve ticked off the eligibility criteria, you must then give your super fund a Notice of intent to claim or vary a deduction for personal contributions (NAT 71121). If you have made contributions to more than one fund during the financial year, you must submit a notice of intent to each of your super funds.

This notice of intent to claim or vary a deduction form must be provided to your fund by either of the following date (whichever occurs earlier):

> the day you lodge your tax return for the year in which you have made the contributions

> the end of the financial year after the financial year in which you have made the contributions

For example, if you made a personal contribution on 27 February 2022, you’ll have to submit your Notice of intent form to your super fund by either 30 June 2023 or before you lodge your 2021/22 tax return (whichever is earlier).

Your super fund should then send you a written acknowledgment, outlining that they have received a valid notice from you. You must have the acknowledgment from your super fund in order to claim the tax deduction when lodging your tax return. Once you have received the acknowledgment, you must only claim a deduction for the personal super contribution amount as stated on your notice of intent.

If you ever need help with lodging your tax return, please feel free to reach out to us through our official Facebook Page (P&C Tax Professionals – Australia) or by sending us an email with your enquiry to pnctax@naver.com.

Thank you and bye for now!